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Source: Compass Minerals news release

Overland Park, KS - Compass Minerals (NYSE: CMP), a leading global provider of essential minerals, today announced it has entered into a definitive agreement to sell its South America specialty plant nutrition business to ICL Brasil Ltda., a subsidiary of ICL Group. The transaction agreement provides for total potential gross cash proceeds of approximately $418 million based on current exchange rates.

The company intends to prioritize the use of proceeds to pay down debt in addition to other corporate purposes. Based upon the midpoint of its adjusted EBITDA guidance range for 2021, the company anticipates the pro forma 2021 year-end leverage ratio to be approximately 3.4 times net debt to adjusted EBITDA, which is significantly below the year-end 2020 leverage ratio of 4.3 times net debt to adjusted EBITDA.

"Over the past year, our board and senior management team have been conducting a detailed analysis of our company's current asset portfolio, product mix and core competencies with the aim of maximizing sustainable value creation for our shareholders, customers and communities," said Kevin S. Crutchfield, president and CEO. "Today's announced transaction represents a significant step toward that goal, as it will strengthen our balance sheet and enhance our ability to pursue strategic opportunities for growth as a leading essential minerals company."

Under the terms of the agreement, Compass Minerals will sell its South America specialty plant nutrition business for approximately R$2.21 billion, payable at closing and subject to adjustments for net debt and working capital. Potential currency rate exposure of the closing payment has been minimized through various financial mechanisms.

Subject to the achievement of full-year 2021 EBITDA performance targets for the business being sold compared to full-year 2020, additional earn-out consideration of up to approximately R$88 million is payable in 2022, calculated on a sliding-scale. The total gross proceeds, assuming payment of the maximum amount of earn-out consideration, represent approximately 9.75x full-year 2020 EBITDA for the business being sold.

"ICL is looking forward to bringing together the South American Plant Nutrition business with its existing specialty plant nutrition portfolio in Brazil, one of the world's fastest growing agriculture markets," said Raviv Zoller, president and CEO of ICL. "We are also excited to welcome the strong team of professionals who operate the business to the ICL family."

The transaction is expected to close in the third quarter of 2021, subject to customary closing conditions and required antitrust approval in Brazil.

As previously announced, the company launched dual sales processes earlier this year for its plant nutrition and chemicals businesses in Brazil. The company's South America chemicals business is not included in this transaction and that sale process is ongoing.

Post-transaction, Compass Minerals will continue to produce, manufacture and innovate a broad portfolio of salt and magnesium chloride products throughout North America and the U.K, for use in winter roadway safety and a number of other consumer, industrial and agricultural applications. The company also will continue to be a market-leading North American producer of premium plant nutrition products.

J.P. Morgan Securities LLC is serving as exclusive financial advisor to Compass Minerals in connection with the sale of the company's South America specialty plant nutrition business.

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